Merali completes acquisition of Bridgestone shares

Naushad Merali has completed the acquisition of Bridgestone’s 14.9 per cent stake in Sameer Africa, paving the way for the businessman to tap a new strategic partner in the listed tyre firm.

Regulatory filings show that Mr Merali’s Sameer Investments Ltd (SIL) had by December acquired Bridgestone’s 41.4 million shares for Sh207.4 million.

The intention to acquire the shares was announced in October after Bridgestone terminated the agreement to supply Sameer with technical expertise in tyre manufacture and distribution.

READ: Merali parts ways with Bridgestone

The exit of Tokyo-based Bridgestone paves the way for Sameer to seek a new partner who is expected to become a shareholder by acquiring part of SIL’s enlarged stake.

The stake of Mr Merali’s investment vehicle in Sameer Africa stands at 72.15 per cent up from 57.25 per cent following the purchase of Bridgestone shares. The additional stake will be sold to a new strategic partner.

“The private transaction … will facilitate the enlisting of support from a technical partner who is expected to acquire a portion of SIL’s shareholding in Sameer Africa,” the firm said in a notice to shareholders.

Sameer disclosed that the prospective new partner had asked for the exit of Bridgestone from the company’s shareholder roll before it could entertain any proposals.

This implies that the unnamed potential partner is a direct competitor of Bridgestone either in the local or international markets. 

SIL bought out Bridgestone at an estimated Sh5 for each of the 41.4 million shares, valuing the deal at Sh207.4 million. The firm’s stock currently trades at Sh6.3, representing a 26 per cent jump over the deal price.

Sameer started looking for a new technical partner after Bridgestone announced the withdrawal of its franchise in April last year, with the move linked to difficulties in their business alliance.

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The firm reported that production difficulties at Bridgestone and challenges with supply pipeline management adversely impacted the sale of Bridgestone branded tyres in 2012.

Sameer’s 2012 annual report shows that it received 66 per cent of the orders placed to Bridgestone for tyres. This saw sales of the brand drop three per cent in the year to December 2012.

Bridgestone orders were filled at an average rate of only 66 per cent, leading to the tyre brand’s sales volume declining three per cent in the year ended December 2012.

The company currently deals in the Yana tyre brands, with the Bridgestone brands expected to have been withdrawn following the exit of its franchise owner.